Gillard Seeks to Burnish Green Credentials

By RACHEL PANNETT
CANBERRA—Facing a tough election fight next month, Australian Prime Minister Julia Gillard on Friday reaffirmed her center-left Labor government's commitment to curbing greenhouse-gas emissions, unveiling a range of interim measures to green up the economy before a carbon cap-and-trade program is in place.

"Climate change is real and it is caused to a significant extent by human activity," Ms. Gillard said in a speech in Brisbane.

Her predecessor Kevin Rudd, ousted in a Labor Party mutiny on June 24, angered progressive voters in April when he shelved plans for a carbon emissions trading scheme until at least the end of the current Kyoto Protocol period in 2012.

The scheme met an impasse in the upper house Senate, where it was opposed by conservatives as too tough on industry and the environmentalist Greens as too lenient.

Mr. Rudd's carbon trading backflip led critics to question his credibility, given he was elected to office in November 2007 in large part on his pledge to make Australia greener, describing global warming as the "biggest moral issue of our time."

Australia uses fossil fuels, chiefly coal, for around 90% of its electricity generation, making it one of the biggest per-capita polluters in the developed world.

Ms. Gillard is seeking to re-establish the ruling Labor Party's green credentials ahead of a general election due Aug. 21.

But in doing so she is treading a difficult path between green groups who argue anything short of putting a price on carbon--forcing big polluters to pay for their greenhouse-gas emissions--amounts to inaction, and big industry groups, who argue Australia shouldn't adopt any climate program that would set it apart from its global peers.

Tony Abbott, leader of the main opposition Liberal-National coalition of center-right parties, described Labor's latest policies as "camouflage for the coming carbon tax."

Christine Milne, leader of the environmentalist Greens party—which is likely to hold the balance of power in the Senate after the election—accused Ms. Gillard of "making excuses for more delays" while other countries are moving toward putting a price on carbon emissions.

In the U.S., President Barack Obama's push to curb greenhouse-gas emissions was dealt a blow Thursday when the Senate postponed its bid to pass broad legislation to combat climate change until September at the earliest.

The delay means that Mr. Obama's fellow Democrats, who control Congress, have little time to advance the complex legislation amid intense political pressure in the weeks before November congressional elections.

It is also a possible setback to global climate talks, which are widely seen as dependent on actions taken by the world's biggest economies, and polluters, like the U.S. and China.

Though Ms. Gillard has said she won't resurrect Australia's cap-and-trade plans any earlier than 2012, she announced Friday that, if re-elected, Labor will offer companies an incentive to cut their emissions before then, rewarding any early efforts by requiring them to purchase fewer carbon permits in any future carbon-trading market.

The baseline for any emissions reduction efforts will be the same starting point as in the government's proposed carbon pollution reduction scheme, which was shelved earlier this year.

"It will make businesses think twice before adding to their pollution levels ahead of a future market, because if they pollute more, they may have to make even greater emissions reductions down the track," Ms. Gillard said.

"The price of inaction is too high a price for our country to pay," Gillard said.

Any new coal-fired power stations built under a re-elected Labor government will be subject to tough emissions standards—and will need to be set up to sequester any greenhouse-gas emissions underground, a process that would potentially reduce the environmental impact of burning dirty fuels such as coal for power generation.

Labor, which already passed laws requiring 20% of Australia's electricity to come from renewable sources by 2020, also will spend 1 billion Australian dollars (about $890 million) over the next decade connecting renewable energy sources—like wind and solar power—to the national electricity grid.

Some of Australia's richest solar, biomass, wind and geothermal resources are in remote regions—like central and northern Australia—and are not connected to the main electricity networks.

Also, Labor will establish a new A$100 million Renewable Energy Venture Capital Fund for renewable energy projects.

Ms. Gillard also announced a new 150-strong "citizens' assembly" to seek a fresh community consensus on climate change policy, and an independent panel of scientists to provide policy

Write to Rachel Pannett at rachel.pannett@dowjones.com